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Posted by Katie on April 12, 2007, 12:06 am
Please log in for more thread options satish.gran...@gmail.com wrote:
> My Wife and I got married in June'2006. Following is our
> situation
>
> Before our marriage my wife had been working in California
> with a company.
>
> After marriage she moved to Massachusetts and is working in
> MA for the same company.
>
> I have been in MA the whole year & have no income whatsoever
> from CA.
>
> We do not have any itemized deductions & do not have any
> complex investments/dividends etc.
>
> Following are the queries that I have
> 1. What are our options filing federal and state taxes?
> a) Can we file jointly or separately?
> b) What are the options filing for state taxes? (MA & CA)
> 2. More concerned regarding the state taxes. How do we file
> our state taxes? Do we have to file in both the states? If
> we want to file jointly how would it work for the state of
> CA where my spouse has worked for half the year & for the
> state of MA?
> 3. If we File as Married Filing Jointly in each state but
> only for the time lived there how would we report our income
> on the Tax Forms. Specifically lets say my spouse earned
> "S1" dollars in CA and "S2" dollars in MA and I earned "M"
> dollars in MA how would we report these incomes to each
> state?
You are a full year resident of MA. Your wife is a
part-year resident of CA, and a part-year resident of MA.
For MA purposes, you cannot file a joint return. You must
file married filing separately. You would file a full-year
resident return on Form 1, and your wife a part-year
resident return on Form 1 NR/PY. Your return would include
your M dollars of income. Her return would include her S2
dollars of MA income (and any other income she received
after she became a MA resident).
For CA, assuming you had no CA source income, you have the
choice of filing either married filing separately or
jointly. Either way, you would use Form 540NR. Because of
the graduated rates, all of your income from all sources is
used to compute the average rate that would have resulted if
your wife (if separate) or both of you (if joint) had been
California residents for the entire year. That rate then
applies to your wife's income from all sources received
during the part of the year when she was a California
resident, and any California source income she may have
received after she became a nonresident (a final paycheck,
for example, that might have been received after she moved
to Massachusetts). She will probably be better off to file
separately, but you should calculate it both ways.
If there is some double-taxed income, e.g. a final paycheck,
bonus, or other payment from your wife's CA employer
received while she was a MA resident, MA will allow her
credit for the CA tax on that income, limited to the
proportion of her MA tax liability that relates to that
income.
Katie in San Diego
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